Illumina Defends Its Grail Acquisition to FTC

The San Diego-based DNA-sequencing company Illumina says its acquisition of the biotechnology company Grail would bring blood-based cancer detection tests known as liquid biopsies to market sooner, yet it is once again being forced to defend its $7.1 billion purchase of Grail to regulators.

In September, an administrative law judge rejected the FTC’s concerns that the acquisition could stymie competition. However, the FTC appealed the case, leaving it up to the agency’s five commissioners to decide whether to uphold or overturn the judge’s ruling.

Become a Subscriber

Please purchase a subscription to continue reading this article.

Subscribe Now

All current blood-based cancer tests currently rely on Illumina’s equipment, and the FTC is concerned that Illumina could disrupt competition in the emerging market for the tests.

In the words of FTC senior counsel Susan Musser, Illumina’s sequencers “are the only game in town.” Musser says Illumina is seeking to become a testing company through its acquisition of Grail, not just a provider of sequencing tools.

Illumina, however, contends that through the acquisition, Grail would be able to accelerate bringing its cancer tests to market. Even speeding this process by one year has the potential to save 10,000 lives in the U.S. alone, according to attorney and partner with Cravath, Swaine & Moore David Marriott, which is representing Illumina.

“It’s time for the FTC to end this case and to start supporting the screening of cancer, assisting patients, and lowering the cost of healthcare,” Illumina spokesperson David Alpine wrote in an email.

“It is entirely possible that the FTC will overturn the [judge’s] ruling,” Eleanor Fox, New York University Law School’s Walter J. Derenberg Professor of Trade Regulation, wrote in an email. “A huge question is whether more lives will be saved by allowing or prohibiting the acquisition. Is innovation likely to be better and swifter with more competition or more integration? This is a complicated fact question. A leaning of the antitrust law is to more competition, but of course this is always in factual context.”

If the Commission decides against Illumina, it would still have the option to appeal.